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What Went Wrong Having built the 49ers dynasty, Carmen Policy and Eddie DeBartolo saw their partnership crumble under the weight of mistrust and front-office power plays

Aug. 03, 1998
Aug. 03, 1998

Table of Contents
Aug. 3, 1998

Baseball

What Went Wrong Having built the 49ers dynasty, Carmen Policy and Eddie DeBartolo saw their partnership crumble under the weight of mistrust and front-office power plays

For all of the flowery tributes thrown Carmen Policy's way after
his sudden departure from the San Francisco 49ers last
week--master of the salary cap, architect of a dynasty, the
Jerry Rice of the front office--in reality the outgoing team
president's most praiseworthy quality was a deftness at dealing
with people. Even Policy's enemies marvel at his ability to
charm the press, the public and, most important, his peers
around the league. Yet on the night of July 19, Policy delivered
a sales pitch to a friend and confidant, NFL commissioner Paul
Tagliabue, that fell flatter than Vince Lombardi's haircut.

This is an article from the Aug. 3, 1998 issue

As they dined at Nicola's, a restaurant on the Upper East Side
of Manhattan, Policy told Tagliabue of a risky decision that
several days later would rock the football world: Assuming a
meeting with billionaire credit-card magnate Al Lerner went well
the next day, Policy planned to walk away from running the NFL's
winningest organization of the '80s and '90s and become part of
a Lerner-financed group bidding for the new Cleveland Browns
franchise, which will begin play in 1999. Policy, the NFL's
executive of the year in 1994, figured Tagliabue would be
sensitive to his shaky status in San Francisco (the result of a
feud with his longtime boss, friend and mentor, exiled 49ers
owner Eddie DeBartolo) and to his desire to enter a bidding war
for the Browns that could be decided by the end of August.

Instead, the normally stoic commissioner was clearly upset. In
the wake of well-documented tension between DeBartolo and his
sister, acting 49ers chairwoman Denise DeBartolo York, and given
a possible delay in the construction of San Francisco's
voter-approved stadium and retail complex, Tagliabue fretted
over the further instability that Policy's departure might
create within the Niners' organization. "You've got a great
track record in San Francisco," Tagliabue told him, "and you're
giving all that up on a speculative basis. There's no guarantee
you'll get the team in Cleveland."

Feeling that he was guaranteed to be fired if he stayed in San
Francisco, Policy joined forces with Lerner two days later,
evoking similar sentiments of displeasure from some of the
wealthiest men in Ohio, from his former bosses in San Francisco
and from many NFL owners. Not since Robin Hood had one man
ticked off so many rich people. In contending that Policy had
been laying the groundwork for his move to a competitor while
serving as the Niners' president and chief decision-maker, 49ers
CEO Larry Thrailkill, second to York in the Edward J. DeBartolo
Corporation's command structure, said, "It's not the way you
would like things to happen, but people do what they do, and you
adjust."

Other owners and team honchos were bothered less by Policy's
unexpected exit from San Francisco than by his lavish landing in
Cleveland, where last Thursday he showed up at a jam-packed
press conference wearing a brown sport coat and orange tie and
pronounced Lerner's group a front-runner in the battle for the
Browns. One high ranking AFC executive who has spoken with
several owners viewed the spectacle, which included in-person
endorsements from Cleveland mayor Michael White and beloved
former Browns quarterback Bernie Kosar, as "a shameless attempt
to scare away other bidders. A lot of people are pissed about
it, because we'd like to get a competitive situation that will
drive the price up, and these guys are trying to shill the
value. Al Lerner's a very shrewd guy, and he's probably been
plotting this with Carmen for a long time, but this is business,
and he's going to have no inside track with the NFL. Our first
reaction to that press conference was, 'Give me a break.' Our
second was, 'Great. What's your bid?'"

Policy came under fire in particular for declaring at the press
conference that his group has at least a 50-50 chance of getting
the Browns. In an interview the next day, Tagliabue referred to
that assessment as "overly optimistic," a view shared by Dallas
Cowboys owner Jerry Jones. "He may have a 100-percent chance if
he knows their bid will beat all comers," Jones said. "But
anyone who would jump up and say he has the inside track is
misinformed. There are some other people out there who I know
will not flinch at those scare tactics, and there are some very
wealthy potential buyers who will come out of the woodwork
before this is all over."

In the meantime, blindsided Browns bidders and their
partners--like former Miami Dolphins coach Don Shula, comedian
Bill Cosby and Hall of Fame running back Jim Brown--will surely
join jilted Niners fans and conspiracy theorists in wondering
why Policy, a native of Youngstown, Ohio, the home of the
DeBartolo empire, felt compelled to give up his annual salary of
$1.5 million for a possible return to his home state.

This saga begins with the dissolution of the 30-year friendship
of DeBartolo and Policy, who have been increasingly distrustful
of each other since 1995 and have not spoken since late January.
DeBartolo has been under investigation for more than a year as
part of a gambling fraud case in Louisiana, a situation that led
him to voluntarily recuse himself from involvement in the
day-to-day operation of the team while the probe continues. But
there have been indications that DeBartolo may be close to
resuming his role as an active owner and possibly buying out his
sister's share of the 49ers. Such a development would have been
ruinous to Policy, and according to two league sources familiar
with Browns-related developments, he began looking into
Cleveland as an option in March (although in April, Policy
denied that he had mounted any such effort). When Lerner, a
minority owner of the former Browns franchise who sat with
principal owner Art Modell in 1995 at the press conference
announcing the club's move to Baltimore, offered last week to
make Policy the Cleveland president and a 10% owner if Lerner is
awarded the team, Policy said yes.

The rift between DeBartolo and Policy has become entangled with
tension that has developed in recent months between DeBartolo
and his sister. Policy declined to discuss specifics of the
feud, York did not wish to be interviewed, and DeBartolo has not
made any public comments since word of his possible indictment
in Louisiana surfaced last December. But interviews with sources
close to DeBartolo and Policy reveal the following reasons for
their falling out:

--A personality clash between Policy and DeBartolo Entertainment
president Ed Muransky, who has displaced Policy as DeBartolo's
closest confidant. It was efforts by DeBartolo Entertainment, a
company founded by DeBartolo in 1995, to land a riverboat-casino
license in Bossier City, La., that led federal authorities to
include DeBartolo in a probe of former Louisiana governor Edwin
Edwards, whose attorneys have said that DeBartolo paid him
$400,000 in cash to act as a lobbyist.

--Money. Policy was skilled at manipulating NFL salary-cap
restrictions by restructuring player contracts and relying on
prorated signing bonuses and incentive clauses, but DeBartolo
came to believe that he was not adhering to corporate wishes in
regard to the bottom line. In July 1997 DeBartolo, who had been
under the impression that the 49ers would break even that year,
saw financial records projecting a loss of more than $10
million. He also expressed anger to team officials that Policy
had not informed him of signing bonuses given to several players.

--Organizational turmoil. After the '96 season DeBartolo began
negotiating with his sister on a spin-off arrangement that would
have broken up their financial partnership, essentially allowing
DeBartolo to buy the 49ers, who are owned by the DeBartolo
Corp., in exchange for his share of the family business. Policy
believed at the time that if the deal had gone through, he would
have been ousted by DeBartolo. But the agreement was derailed
that summer by the onset of the Louisiana probe, and with
DeBartolo expecting the NFL to step in, Policy helped devise the
plan that eliminated DeBartolo from active ownership, put the
team under York's stewardship and increased Policy's power, even
allowing him to replace DeBartolo on the DeBartolo Corp.'s board
of directors.

--A power struggle. In January, DeBartolo reviewed minutes from
DeBartolo Corp. board of directors meetings and was enraged to
learn that Policy had voted for the sale of the jet DeBartolo
had used as his personal aircraft. DeBartolo's feelings of
betrayal increased when he heard that Policy had met with
several investors interested in buying the 49ers. Policy
concedes that such talks took place, but says they were done
with the DeBartolo Corp.'s blessing. One potential investor, who
did not want his name used, says that he and a partner talked
with Policy about buying the team and including Policy as a
minority owner. The investor says the DeBartolo Corp. knew of
those talks. In response, York said, "The DeBartolo Corp. has
never authorized the sale or marketing of the team."

--Communication breakdowns. Policy says that during a February
meeting in Youngstown, York instructed him and two other team
officials, executive vice president Dwight Clark and chief
financial officer Bill Duffy, not to discuss business with
DeBartolo--something for which Policy believes DeBartolo blames
him. "I never did one thing that wasn't approved by the
corporation," Policy said as he cleaned out his office at the
team's Santa Clara, Calif., headquarters last Friday night.
"Here's what Eddie has to understand: Things changed. For so
long, we all viewed Eddie as the solitary power, which he was.
But then we were told to act in a certain way, and Eddie wasn't
involved. What can I say? It's like telling the king, 'Sorry,
your majesty, but you're just not the king anymore.'"

In March DeBartolo and his sister were close to a deal on
another buyout, after which DeBartolo planned to fire Policy and
replace him with former 49ers coach Bill Walsh. The deal fell
through, but Policy knew he was vulnerable, and in early July he
began speaking to Lerner. On the day after his dinner with
Tagliabue, Policy met for 15 hours with Lerner at the Manhattan
office of MBNA Corp., the $65-billion credit-card company of
which Lerner is CEO. Policy, who enjoyed a striking amount of
freedom after being appointed team president by DeBartolo before
the 1991 season, said he wasn't convinced until Lerner told him,
"My successes in life are attributable to picking the right
people for a particular business, then stepping aside and
letting them run the business."

The next day Policy met with York and Thrailkill in Youngstown.
Citing his strained relationship with DeBartolo as a major
factor, he asked for and received a release from his contract,
which was due to expire in February.

That night York called her brother with the news, a sign that
their relationship had improved following a meeting in
Youngstown two weeks earlier. In early July, relations between
them had been so strained that Thrailkill had asked Tagliabue to
rule on the validity of ownership papers, signed by DeBartolo,
York and their father, Edward J. DeBartolo Sr., that gave the
younger DeBartolo operating control of the team through 2006, as
well as veto power over any sale. (The commissioner says the
matter is still under consideration.) Tagliabue, among others,
believes DeBartolo and York may now resume negotiations for a
buyout deal. Says Policy, responding to criticism that he left
the Niners in the lurch: "Not only do I not feel I abandoned
ship, I feel my leaving could facilitate an agreement between
Eddie and Denise to finally get the ownership situation settled.
My being [in San Francisco], I think, served as a flash point,
the dry gunpowder for the continuing problems they were having."

Before leaving the Niners, Policy hammered out contract
extensions for Clark, Duffy, player personnel director Vinny
Cerrato and other employees believed to be vulnerable if
DeBartolo were to resume active control. Once a close friend of
DeBartolo's, Clark expressed his regard for Policy after the
resignation announcement by saying, "Our group upstairs just
lost their Jerry Rice." Yet Rice and the other San Francisco
players were far less fazed by Policy's departure, which they
learned about from coach Steve Mariucci after being rousted from
their dorm rooms at the team's Stockton, Calif., training camp
late on the night of July 21. "A lot of the younger players
said, 'Does this mean the cafeteria's still open?'" said
quarterback Steve Young. Strong safety Tim McDonald added, "I
had a few young guys ask me, 'Who's Carmen Policy?'"

Assuming the 49ers have another successful year (they advanced to
the NFC Championship game last season), Mariucci would seem to be
on solid ground with DeBartolo. But there has been much media
speculation that the return of DeBartolo might bring with it a
run at Mariucci's former boss, Green Bay Packers coach Mike
Holmgren. Under his contract with the Packers, Holmgren, a former
49ers offensive coordinator and a San Francisco native, will be
free after this season to field outside offers to become a
general manager. Until then, the rest of the 49ers front office
should remain intact, although DeBartolo is known to be
interested in bringing in Walsh to perform some of the duties
formerly handled by Policy.

In the meantime the team will be run by Thrailkill, a Nashville
native with no football background. Thrailkill displayed some
charm of his own at Policy's press conference, when he said, "I
didn't plan on this, and we'll face some difficult decisions, but
I don't think I'm mistaken in saying Eddie trusts me and Denise
trusts me."

In Lerner, meanwhile, Policy has aligned himself with a man who
has been largely reviled since Modell and Maryland officials
struck the deal to move the Browns--a bit of business transacted
aboard Lerner's private jet. Though his hand has certainly been
strengthened by his union with Policy, Lerner, who has lived in
Cleveland for almost 40 years, faces some heavy hitters among
those expected to make opposing bids: Cablevision chairman
Charles Dolan and his brother Larry (with Cosby and Shula
attached); New York developer Howard Milstein (whose group
includes Browns Hall of Famer Paul Warfield and ex-Cowboys star
Calvin Hill); Cleveland developer Bart Wolstein (backed by Jim
Brown); Cleveland Indians owner Dick Jacobs; and suburban
Cleveland toy-manufacturing mogul Tom Murdough.

Lerner and Policy believe that they are the most qualified of
the potential bidders. "I think Cleveland, with Carmen, has a
chance to get it done quicker and better than anything I see out
there," Lerner said last Friday. Kosar, who will likely receive
a front-office job if Lerner and Policy land the franchise, also
stressed the time element, saying, "We're one year away from
playing football, and with that condensed time line, you cannot
afford on-the-job training or a learning curve."

The decision, which will be made by a vote among the 30 league
owners, is likely to come down to money, an astounding amount of
money. According to Cowboys owner Jones, the price tag on the
recent Minnesota Vikings sale, when tax breaks and debt
forgiveness are factored in, was approximately $325 million.
Jones says the Browns, with a new lakefront stadium as a huge
revenue source, can expect to earn "$50 to $75 million a year
more than the Vikings. I'm sick of reading that the Browns will
sell for $300 million--that's incredibly low. In my estimation,
the price will be in the high hundreds of millions, between $700
million and $900 million."

While conceding that Lerner could afford to pay that much for
the franchise, Jones couldn't resist taking a gentle dig at
would-be part owner Policy, who, it seems, will not be able to
escape his history with DeBartolo as easily as he fled San
Francisco. "I don't begrudge Carmen for hooking up with somebody
who might make a great owner," Jones said. "It would be a good
experience for him to make some of the decisions he has made in
the past, while at the same time having to pay the bills."

JOHN IACONO HAPPY DAYS DeBartolo (far left, with Steve Young) and Policy were the team behind the team that won the '95 Super Bowl. [Eddie DeBartolo, Steve Young and Carmen Policy]COLOR PHOTO: BRAD MANGIN WELL BUILT Policy's skill at the bargaining table fortified the Niners (shown here stopping the Vikings' Andrew Glover) on the field.
Dealing with DeBartolo meant telling him, "Sorry, your majesty,
you're not king anymore."